Sears, Roebuck & Co. v. Lea

• Decision Date: 19 September 1952
• Docket Number: No. 11460.,11460.
• Parties: SEARS, ROEBUCK & CO. v. LEA.
• Court: U.S. Court of Appeals — Sixth Circuit

198 F.2d 1012 (1952)

SEARS, ROEBUCK & CO. v. LEA.

No. 11460.

United States Court of Appeals Sixth Circuit.

September 19, 1952.

Murray Seasongood, Cincinnati, Ohio, Murray Seasongood, Thomas M. Stanton, on brief; Paxton & Seasongood, Cincinnati, Ohio, of counsel, for appellant.

H. Randolph Kramer, Owensboro, Ky., H. Randolph Kramer, John F. Wood, Owensboro, Ky., on brief, for appellee.

Before MARTIN, McALLISTER and MILLER, Circuit Judges.

MILLER, Circuit Judge.

In this action, heard by the District Judge without a jury, the Appellee Daisy Lea recovered a judgment against the Appellant, Sears, Roebuck and Company, in the sum of $5,000 for damages suffered through the alleged breach of three contracts made by the Appellant for the furnishing and installation of roofing material and insulation for two buildings owned by the Appellee.

The Appellee owned an apartment building at 320½ West Third Street, Owensboro, Kentucky, and also a commercial garage located at 316 West Third Street. By written contract of June 20, 1945, the Appellant agreed, for a consideration of $400, to furnish the materials, as specified therein and subject to the guarantee set forth on the reverse side of the contract, for re-roofing the apartment building at 320½ West Third Street. The contract provided —

"This Proposal and any installment contract (s) required shall constitute the entire agreement between the parties. Materials and workmanship are guaranteed by Sears exactly as specified in the guarantee set forth on the reverse side of this Proposal."

The guarantee on the reverse side provided —

"Should such roof leak at any time within a term of five years from date of application due to defective materials or faulty workmanship, we will, upon receipt of reasonable notice, replace, or cause necessary repairs to be made without charge to you.

* * * * * *

"The above guarantee is in lieu of and excludes all other guaranties, warranties, obligations or promises, express or implied, by contract or by law, and no person is authorized to assume for Sears any other liability in connection with the sale of said roofing and/or siding material or installing thereof by a Contractor. This guarantee can not be construed to cover any damage to the interior of the premises in which the roof and/or siding is applied, or to any pictures, furniture, decorations or other personal property; it is understood that Sears shall not be liable for damage to any of said items."

By written contract of July 26, 1945, the Appellant, for a consideration of $775.00, agreed to furnish the materials, as specified therein and subject to the guarantee set forth on the reverse side of the contract, for re-roofing the garage building at 316 West Third Street. This contract contained the same provisions as did the former contract with respect to the contract constituting the entire agreement between the parties, and the guarantee on the reverse side thereof.

By written contract of October 6, 1945, the Appellant, for a consideration of $200.00, agreed to furnish the materials, according to the specifications contained therein, to insulate a certain specified portion of the apartment house. This contract contained the following provision:

"The undersigned customer herewith authorizes Sears, as his agent, to employ a contract installer (hereinafter for convenience called the `Contractor\') to install and affix said materials in accordance with said specifications. It is understood that Sears will not install said materials. The price quoted below includes the charge to be made by the Contractor for said installation work and customer requests and directs Sears to pay the said Contractor, for customer\'s account, the Contractor\'s charge for such installation when the installation has been completed."

This contract did not contain a guarantee.

By the complaint as finally amended, the Appellee alleged (1) that the Appellant breached the contract of June 20, 1945 "in that said roofing furnished was defective or same was installed in a careless, negligent manner or was installed by incompetent and unqualified person or persons or both; that the said roof leaked water in a number of places * * *" and that as a result of the breach the Appellee was damaged in the amount of $3,832.80; (2) that the Appellant breached the contract of July 26, 1945 "in that the said material furnished by said defendant was inferior, defective, or that the same was installed by unqualified, incompetent workmen or both, so that the roof on said building leaks water in a number of places," making it necessary that a new roof be placed upon said building at a cost of $1,571.60 to the further damage of the Appellee in the amount of $1,571.60; and (3) that with reference to the contract of October 6, 1945, "the said defendant herein installed or caused to be installed said insulation in a careless or negligent manner by unqualified persons and as a result of said carelessness and negligence and lack of skill, the laths and plaster on the ceiling on the seven rooms heretofore mentioned, cracked and buckled thereby bringing about a portion of the damage herein complained of," and that by reason of the breach of the roofing contract and insulation contract pertaining to said building, the Appellee lost four months' rent of three rooms to her further damage in the sum of $476.00.

The Appellant admitted the execution of the three contracts, denied the breach of each contract by it, and in addition to its denial of certain other allegations, pleaded that the complaint as amended failed to state a claim against the Appellant, and that under the contract of October 6, 1945 the Appellant as Appellee's agent employed a contract installer to install the insulation for Appellee.

Following the conclusion of the trial, the Trial Judge, in an oral opinion from the bench, held that the Appellee had the right to rely upon the Appellant to provide her with the right kind of roof for the apartment building and the garage; that there was an implied warranty in the contracts that the roofs would be reasonably fit for the purpose for which they were purchased; that it was not necessary for the Appellee to prove that the materials were defective or didn't come up to specifications; that the roofs leaked and proved unsuitable for the purpose for which they were purchased; that the insulation was not done in a workmanlike way and caused the Appellee damage; and that the total damage, without making any allocation between the three contracts, should be fixed at $5,000. He overruled Appellant's motion for a dismissal of the action and entered judgment for the Appellee in that amount.

The District Judge, although citing no authority in support of his ruling, apparently relied upon § 361.150(1), Kentucky Revised Statutes, Uniform Sales Act, which provides — "Where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, and it appears that the buyer relies on the seller's skill or judgment * * * there is an implied warranty that the goods shall be reasonably fit for such purpose." However, § 361.150(6), Kentucky Revised Statutes, Uniform Sales Act, also provides — "An express warranty or condition does not negative a warranty or condition implied under this chapter unless inconsistent therewith." It is also provided by § 361.710, Kentucky Revised Statutes, Uniform Sales Act, "Where any right, duty or liability would arise under a contract to sell or a sale by implication of law, it may be negatived or varied by express agreement or by course of dealing between the parties, or by custom, if the custom be such as to bind both parties to the contract or the sale." It has been held by the Kentucky Court of Appeals under these sections of the Uniform Sales Act that a warranty will not be implied where the contract expressly stipulates against its existence or declares no other warranty is made, or may not be relied upon. Vandiver v. B. B. Wilson & Co., 244 Ky. 601, 51 S.W.2d 899; Graves Ice Cream Co. v. Rudolph W. Wurlitzer Co., 267 Ky. 1, 100 S.W.2d 819; Citizens Ice & Fuel Co. v. Fairbanks Morse & Co., 293 Ky. 64, 168 S.W.2d 586; Dreyer-Whitehead & Goedecke, Inc. v. Land, 309 Ky. 113, 216 S.W.2d 413. The two contracts of June 20, 1945 and July 26, 1945 contained the provision — "The above guarantee is in lieu of and excludes all other guaranties, warranties, obligations or promises, express or implied, by contract or by law * * *." If this provision in the contracts was binding upon the Appellee, it was error for the District Judge to award her a recovery based upon an implied warranty of fitness.

It is the settled rule in Kentucky that one who signs a contract is presumed to know its contents, and that if he has an opportunity to read the contract which he signs he is bound by its provisions, unless he is misled as to the nature of the writing which he signs, or his signature has been obtained by fraud....